In this paper we have identified the reemergence of the possibility of a class compromise, but on terms different from those of the historic postwar compromises struck in both the north and the south after the second world war. This compromise is an attempt to resolve the tensions between economic liberalisation and the consolidation of democracy in developing countries such that the costs of liberalisation are more equitably distributed between the social classes.

We have taken South Africa as our case study and have shown how during the struggle for democracy institutions emerged that allowed for agreements to be reached between collective actors. These allow for bargaining over the terms of South Africa’s re-entry into the world economy, what we have called bargained liberalisation. As a consequence, these institutions provide the possibility for reconciling conflicting class interests: for reaching a class compromise. We have furthermore identified the terms of a compromise that could yield growth, equity and redistribution in a context of a labour surplus semi-peripheral country.

However, it is insufficient to identify the necessary conditions and terms of the compromise as well as the institutional means through which it could be struck. Drawing on the experience of the successful political compromise that enabled South Africa’s political miracle, we argue that a number of conditions sufficient for such a compromise have emerged. But this is not to say that a class compromise will ensue. South Africa’s political compromise was a rare achievement, and whether it can be repeated - in arguably the more difficult terrain of the economy - remains to be seen. The alternatives - continued stalemate, increased disorder, and a "descent into decentralised collective violence" - are also likely. But paradoxically, these also provide the strongest incentives for South Africa to achieve what most people believe - as they did in the 1980s - an impossible task.